The British National party was riven last night over its decision to select the grandson of an asylum seeker to fight a seat in next month's local elections.

Sharif Abdel Gawad, whom the BNP describes as a "totally assimilated Greek-Armenian", was chosen to stand in a Bradford ward as part of the party's biggest ever electoral push.

The decision has provoked a backlash among BNP hardliners who described Mr Gawad as an "ethnic" who should be barred from the party on race grounds. One regional organiser responsible for the candidate's selection is thought to be under pressure to resign. Another regional organiser is leading the dissent against the party leadership, saying it had betrayed the members and would confuse voters.

On online noticeboards used by BNP supporters, scores of contributors denounced Mr Gawad's selection. They said the BNP should remain an all-white party and the decision to appoint him was taken over the heads of rank and file members.

Yesterday the BNP admitted it had received a number of calls from angry members and that a hardcore had refused to accept Mr Gawad's candidacy on race grounds "even when it was explained that he was not a Pakistani Muslim".

BNP spokesman Phil Edwards said those members who refused to accept the candidacy had no place in the party.

The rift follows a dispute in 2004 when the party leader, Nick Griffin, tried to force through rule changes allowing non-white people to join the BNP. After widespread opposition from members, the leadership was forced to abandon the proposals.

The BNP says Mr Gawad was named after the actor Omar Sharif because his mother was a fan, and that his grandfather was an Armenian Christian who fled to Britain as a refugee.

But opposition to his selection has filled extremist websites. "It won't deter me from doing what's needed for the election, but we have been let down," read a posting on the Stormfront bulletin board.

"The BNP is the last bastion of hope for our people, they too have been let down if just anyone is allowed to join. Ethnics have every single opportunity afforded them, and now they even get to join the BNP. Just like immigration into this country, we were not consulted. When an ethnic wants to join, it should go to a membership vote. We're the ones who do all the work, we should have a say."

Another read: "No one is listening, and the worst calls I've had today are demanding a leadership challenge."

Several postings said a senior Yorkshire figure had been forced to resign over the issue, a claim the BNP denied last night.

Nick Lowles, from the anti-fascist organisation Searchlight, said the row, which came as the BNP announced it is to field a record 357 candidates on May 4, went way beyond the usual opposition within the party. "The modernisers are trying to make the party seem more acceptable, more mainstream but for most BNP members race is the bottom line, it is a party for white people and that's that."

In 2004 the BNP fielded 313 candidates and received around 800,000 votes. Next month it aims to double its current tally of 20 elected councillors and four parish councillors.

MPs and activists say it is posing a serious threat in up to 80 wards, many of them in five areas in Yorkshire, the Midlands and east London where immigration issues mingle with those of industrial decline.

According to Dagenham's Labour MP, Jon Cruddas - a former adviser to Tony Blair - the BNP is trying to appeal to working-class Labour voters who who feel disenfranchised by New Labour's "middle Britain" strategy, as well as rightwingers.

In industrial areas where coal, steel, textiles or pottery jobs have gone - or shrunk in the case of Dagenham's once-mighty Ford car plant in which 3,000 now work instead of 25,000 - the BNP issues leaflets with slogans such as "Shut Down by the Tories, Abandoned by Labour, Only the BNP Will Stand Up for British Workers". The leaflets depict the BNP as untainted by old, rotten political ways, willing to stand up for ordinary people and say what they think.

Nick Cass, a former Yorkshire and England squash player who is now the BNP's full-time Yorkshire organiser, echoed the theme: "We need a few scallies on the council who'll say, 'I'm not having this.'"

But opponents say the BNP's record as effective councillors is poor, although another form of record has tarnished some prominent members. In each of the last two years, a candidate in the Kirklees area has been convicted of drug offences.

Labour says it is taking the BNP threat seriously. Dudley North MP Ian Austin, who faces BNP candidates in five of his seven constituency wards, has started organising trips to Auschwitz for students. An anti-racist festival is planned for April 30.

Counter-measures including heavy leafleting and canvassing have also proved effective in Dagenham. Here the BNP won a ward from Labour in a byelection in 2004 with 52% of the vote, campaigning on the shortage of affordable housing and an "Africans for Essex" claim - part of what Searchlight calls the Big Lie technique - that foreigners were being subsidised to move in. Labour later regained the seat.

Keighley, where Mr Griffin did badly at the general election, saw a further BNP setback last month when it lost the safest of its four seats on Bradford council to an outraged local mother, Angela Sinfield. She stood for Labour after her campaign against the grooming of young girls for prostitution, including her own daughter, was hijacked by the BNP, which portrayed the pimping, wrongly, as organised by Asian gangs.